Proposed Craig budget faces divided council
In an unusual turn at Tuesday night’s city council meeting, Craig city council’s vote to move forward the first reading of the 2022 budget was split 4-3 among the council members and outgoing mayor Jarrod Ogden.
Councilman and mayor-elect Ryan Hess, who voted no, said one particular part of the budget is of concern for him. Specifically, his hesitations surround a transfer of $85,000 to the Craig Urban Renewal Authority. Hess said he has no problem with the URA as an entity, but this transfer of funds is something he sees as not technically illegal, but unethical.
“The main concern (in the budget) for me was the $85k for the URA,” Hess said in a phone interview the day after the council meeting. “Over the last several years, since the tax initiative was passed, (economic development committee) money went to business grants. The city was never allowed to give away money like that.”
Over the past two years, Small Business Grants have been awarded to various businesses in the city, mainly to be used for facade improvements and other beautification-type projects. In the past, the city has awarded these grants, which was illegal, Hess said. The way the city has chosen to avoid that in the future has been to transfer that money straight to the CURA in hopes that they would continue those small business grants through a program created by that entity. All of the city council members and the mayor are on the board for the CURA.
“There was a belief that this would go around it,” Hess said.
Specifically, the city’s appropriation of those funds to small businesses violates the city charter. Hess said that the charter outlines and prohibits spending money like this to prevent cronyism, and he said that the money that is going to the CURA should be instead saved and put into reserves.
In Article 7, Section 15, the Craig City Charter says that “no appropriation shall be made for any charitable, industrial, educational or benevolent purposes to any person, corporation, or organization not under the absolute control of the City, nor to any denominational or sectarian institution or association, except, when participating with the county, state or federal government, or any agency thereof, in a project beneficial to the City.”
The city is allowed to appropriate money from its funds for public goods or publicly overseen entities. The difference with the Small Business Grants is the private nature of the businesses receiving money. The CURA, a separate entity from the city in spite of the city’s controlling interest, would not be bound by the same law.
Next council meeting, newly elected members of the council will join remaining incumbents for the first time. Councilwoman Andrea Camp and mayor Ogden will step down from their offices because they did not run for reelection, and Hess will move into the mayor’s seat. Newcomers Sean Horvorka and Jesse Jackson will step in for the next vote, and the final seat between Bruce Cummings and Parrish Terry will be decided on Friday, when cured ballots and overseas votes are counted. Cummings led Terry by one vote after the preliminary results released on Election Night, Nov. 2.
If the council does not pass the budget, they will likely have to reconvene and create a new version.
Councilman Chris Nichols, who voted yes on the budget, said that parts of the charter can be too strict on how council can spend its money when it comes to improving the city, which is why council would simply move the funds to the CURA.
“Business improvement grants have been very successful,” Nichols said at Tuesday’s meeting. “The way the charter was written, we couldn’t do those. I think they’ve been very successful. They improve the look of our community, and I feel that if we want to bring business and people moving to our community, we have to start with improving our own, as well. The only reason we’re moving that money to the URA was because of the charter. I hate documents that over-restrict, so we can’t do what the community needs.”
In addition to Hess, Council members Paul James and Steven Mazucca voted against the budget, as well. While councilman James said he also has hesitations about the URA transfer because of the city charter and the state constitution, his main concern is the budget’s deficit. As it is written right now, the budget projects a deficit of $353,690 on the $19,357,445 general fund budget.
“If I (had a deficit that large) in my business, it would fail and (employees) would lose their jobs,” James said in a phone interview Thursday. “I think it’s highly irresponsible to approve a budget that projects losses.”
The city is expected to receive over a million dollars in funds from the American Rescue Plan, but they have not yet been incorporated into the budget because the city does not know for what kind of projects those funds will be appropriated. The city budgeted an uncommonly large deficit in the general fund when it crafted its 2021 budget — nearly $2.5 million — but is instead is now projected to finish the year in the black.
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After a narrow passage of the ordinance’s final reading by the city council, the city of Craig will have an economic development department on the books.